The World Bank has warned Malawi against reopening its only uranium mine, saying the project should be put on hold until global prices improve.
Australia mining company, Paladin Energy, is developing Malawi’s only uranium mine, the Kayelekera uranium mine, in Karonga, northern Malawi. The project was initial suspended in 2014 because of the then unfavourable price climate, but there are indications that the company plans to resume operations in the coming months. “Whether or not the mine at Kayelekera eventually resumes operations will depend primarily on future prospects for global uranium prices, for which the immediate outlook is uncertain,” the World Bank told Malawi in its latest report.Uranium from mining is used almost entirely as fuel for nuclear power plants.
In 2013, Malawi was ranked as the third largest producer of uranium in Africa and tenth in the world. It is behind Namibia and Niger in Africa.
Last year, uranium global prices crashed to $36, from $51 per pound. This posed a major setback to Paladin Energy Africa, having invested heavily on the premise that prices will climb to $70. The Kayelekera uranium deposit was discovered by UK’s CEGB firm and a feasibility study was subsequently undertaken in the 1980s. Paladin acquired the deposit in 1997, accepted a Bankable Feasibility Study early in 2007, and, following environmental approval, undertook a $220 million development. The mine was opened in April 2009.
Paladin Energy (Africa) Ltd holds Paladin’s 85 percent interest following the Development Agreement with the Government of Malawi in control of the remaining 15 percent.
Kayelekera production commenced in mid-2009, and in 2012 production reached 1103 tU, followed by 1134 tU in 2013.